1-3. Tangerine Company and Mr. Orange organized Citrus Corp. with authorized voting common stockof $300,000. Tangerine Company contributed $45,000 cash. Both Tangerine Company and Mr. Orangetransferred other property in exchange for Citrus stock as show below. Mr. Orange received $10,000cash in addition to stock.Adjusted Basis$37,500$97,5001. What is Tangerine Company's basis in Citrus stock?A. $37,500B. $120,000C. $75,000Tangerine CompanyMr. OrangeFair Market Value % of Citrus stock acquired$75,000$190,00040%60%D. $45,000E. $82,5002. What is Mr. Orange's basis in Citrus stock?3. What basis does Citrus take in the property transferred by Mr. Orange?

1. Tangerine company basis in citrus stock = $300,000*40%= $120,000 So, correct option is - B)…

Answered: 1-3. Tangerine Company and Mr. Orange…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Kansas Company acquired a building valued at $158,000 for property tax purposes in exchange for 12,000 shares of its $3 par common stock. The stock is widely traded and selling for $19 per share. At what amount should the building be recorded by Kansas Company? a. $228,000 b. $36,000 OC. $158,000 Od. $191,500
1. Assume X Corp creates a subsidiary, Y Corp, and invests $500,000 cash in exchange for all of the $1 par common stock (2,000 shares). What would journal entries X and Y make at the time of the investment?
During the current year, Swallow Corporation, a calendar year C corporation, has the following transactions: Income from operations $660,000 Expenses from operations 760,000 Dividends received from Brown Corporation 240,000 Click here to view the dividend received deduction table. Question Content Area a. Swallow Corporation owns 12% of Brown Corporation's stock. How much is Swallow's taxable income or NOL for the year? Swallow's taxable income after deducting the dividends received deduction is $fill in the blank fd6fd0f8303e049_2 . Feedback Area Feedback The purpose of the dividends received deduction is to mitigate multiple taxation of corporate income. Without the deduction, income paid to a corporation in the form of a dividend would be taxed to the recipient corporation with no corresponding deduction to the distributing corporation. Later, when the recipient corporation paid the income to its shareholders, the income would again be subject to taxation with no corresponding…
Dristell Incorporated had the following activities during the year (all transactions are for cash unless stated otherwise): a. A building with a book value of $405,000 was sold for $505,000. b. Additional common stock was issued for $165,000. c. Dristell purchased its own common stock as treasury stock at a cost of $77,500. d. Land was acquired by issuing a 6%, 10-year, $755,000 note payable to the seller. e. A dividend of $45,000 was paid to shareholders. f. An investment in Fleet Corporation's common stock was made for $125,000. g. New equipment was purchased for $67,500. h. A $92,500 note payable issued three years ago was paid in full. i. A loan for $105,000 was made to one of Dristell's suppliers. The supplier plans to repay Dristell this amount plus 10% interest within 18 months. Required: Calculate net cash flows from financing activities. (Cash outflows should be indicated with a minus sign.)
Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $37 per share and the building's book value on the books of the seller was $210,000. Which of the following is correct for Smith Company when Smith Issues 10,000 shares of $10 par value common stock and pays $21,000 cash in exchange for the building? Multiple Choice Stockholders' equity increases $210,000. O Total assets increase $349,000. Total assets increase $370,000. Stockholders' equity increases $349,000.
Garrison holds a controlling interest in Robertson’s outstanding stock. For the current year, the following information has been gathered about these two companies: Garrison RobertsonSeparate $300,000 $200,000operating income (includes $50,000 intra-entity gross profit in ending inventory)Dividends paid ...32,000 50,000Tax rate . . . . . . . . . 40% 40% Garrison uses the initial value method to account for the investment in Robertson. Garrison’s separate operating income figure does not include dividend income for the current year.a. Assume that Garrison owns 80 percent of Robertson’s voting stock. On a consolidated tax return, what amount of income tax is paid?b. Assume that Garrison owns 80 percent of Robertson’s voting stock. On separate tax returns, what total amount of income tax is paid?c. Assume that Garrison owns 70 percent of Robertson’s voting stock. What total amount of income…
Abel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows: Adjusted basis of the property at the distribution date: $20,000 FMV of the property at the distribution date: $19,000 a. What is Jay's basis in his stock investment after the distribution? b. What is Jay's basis in the property after the distribution? c. What amount of loss would Abel Corp. recognize as a result of the distribution?
Kelly's Corp. authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: Kelly's Corp purchased a piece of land from the original owner. In payment for the land, Kelly's corp issues 300,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,200,000 The company sold 120,000 shares of common stock with $1 par value. Issued 25,500 shares of $20 par value preferred stock. Shares were issued at par. Earned net income of $764,000 Dividend declared and paid - $0.15 per share on common stock Dividend declared and paid - $5 per share on preferred stock 1a. Do the Journal entries and closing entries for the above transactions 1b. Do the owner’s equity section of the balance sheet only!
Acme Company owns 35% of Superior Company. Superior Company declared and paid $44,000 cash dividends for the year. Acme Company's journal entry to record the dividends includes a: Ocredit to the Investment account for $44.000. credit to Dividend Revenue for $15.400. credit to the Investment account for $15,400. credit to Dividend Revenue for $44,000. None of the above. C
0 Required information [The following information applies to the questions displayed below.] a. On March 22, purchased 700 shares of RPI Company stock at $22 per share. Duke's stock investment results in it having an insignificant influence over RPI. b. On July 1, received a $2 per share cash dividend on the RPI stock purchased in part a. c. On October 8, sold 350 shares of RPI stock for $32 per share. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including+ or -) for each transaction. k Assets Liabilities + a. 8 CO M I K ( 9 ; I option { [ ? I Equity + 11 "1 C } ] Save & Ext Check delete
Rogrer Company received a machine with a fair value of $130,000 and a building with a fair value of $200,000 in exchange for 6,000 shares of $45 par value common stock and $50,000 cash. The entry to record this transaction would include: Select one: a. Credit to Common Stock for $280,000 b. Credit to Additional Paid in Capital for $10,000 c. Credit to Retained earnings for $10,000 d. Credit to Additional Paid in Capital for $280,000
1. Bonnie, Olivia, Warren and Andy form Lobster Corporation with the following investments: Basis to Shares Transferor FMV Issued From Bonnie- Personal services rendered to Lobster Corporation $ -0- $30,000 30 From Olivia- Equipment $345,000 $300,000 270 From Warren- Cash Unrealized accounts receivable $60,000 -0- $60,000 90,000 150 From Andy- Land and building Mortgage on land and building $210,000 300,000 $450,000 300,000 150 The mortgage transferred by Andy is assumed by Lobster Corporation. The value of each share of Lobster Corporation stock is $1,000. Olivia receives $30,000 cash in addition to the 270 shares. Required: What are the tax consequences (i.e. realized gain/loss; recognized gain/loss; basis) to each of the transferors and Lobster Corporation as a result of the formation?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS